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Pacific Biosciences Q1 Revenues Grow 14 Percent

NEW YORK – Pacific Biosciences reported after the close of the market on Wednesday that its first quarter 2022 revenues rose 14 percent year over year, driven by sales of instruments and consumables.

For the three months ended March 31, the Menlo Park, California-based company recognized revenues of $33.2 million, compared to $29.0 million in Q1 2021, beating analysts' average estimate of $32.8 million.

Instrument revenue was $15.6 million, compared with $14.9 million a year ago. Consumables revenue was $12.7 million, up from $10.4 million in Q1 2021. Service and other revenue was $4.9 million, compared with $3.7 million a year ago.

The company placed 50 Sequel II or IIe systems in the quarter, including 18 at the Broad Institute, bringing the total installed base to 424 instruments as of March 31, compared to 244 instruments at the end of the year-ago quarter.

"Our team continued to make progress expanding our installed base with our third consecutive quarter of record Sequel II/IIe placements," PacBio CEO Christian Henry said in a statement. "As expected, COVID-19 restrictions created challenges for both our customers and our team which lowered system utilization, but we believe those challenges are transitory and our continued strength in system placements and our recent Sequel IIe platform enhancements can enable more customers to realize the benefits of our technology than ever before."

On a conference call with investors following the release of the results, PacBio officials noted that COVID created issues with customer operations, as well as its own, on top of typical seasonality. They also provided comments on a change to the company's agreement with Invitae for a high-throughput clinical whole-genome sequencing (WGS) instrument and shared plans on how the firm plans to use its cash on hand.

Revenues from the Americas was $19.1 million, up 57 percent year over year, driven by record instrument sales. Revenues from Europe, the Middle East, and Africa were $5.7 million, down 32 percent from the prior-year period, attributable to a surge in COVID-19 cases in Europe early in the quarter. Henry noted that the company delivered its first Sequel II or IIe instruments to Israel, Poland, Serbia, and Austria. Asia-Pacific revenues were $8.4 million, down 1 percent from the prior-year period, attributable to lower instrument revenues and "muted" consumables revenues growth in China due to COVID-19 headwinds.

PacBio's net loss for the quarter was $81.5 million, or $.37 per share, compared to a loss of $87.4 million, or $.45 per share, in the prior-year period, missing the consensus Wall Street estimate of a $.31 loss per share.

The firm's R&D expenses in Q1 more than doubled to $52.9 million from $20.5 million in Q1 2021. Its SG&A expenses jumped 52 percent year over year to $39.8 million from $26.1 million a year ago.

PacBio is in the process of amending its agreement with Invitae related to the development of a high-throughput WGS sequencer. Instead of receiving payments from Invitae during development, PacBio will now receive larger payments down the road. "All we're doing is changing timing of when they make payments to give them flexibility on their cash," Henry said. The firms expect to finalize the changes this quarter.

As of March 31, the company had $962.8 million in cash and investments. "PacBio is in a strong financial position, and based on our estimates, we intend to fund the company’s current development and commercialization plans using the cash and investments on our balance sheet until we reach positive operating cash flows, without needing to raise additional capital," Henry said. PacBio officials reiterated FY 2022 revenue guidance of between $160 million and $170 million, representing 23 percent to 30 percent growth over 2021. PacBio CFO Susan Kim added that the firm expects second quarter revenues to grow sequentially.

In Thursday morning trading on the Nasdaq, shares of PacBio were down 8 percent at $6.72.